-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F8o8ifi/H+GaljRNVkiqzBXPZ6fvUgxjizYWW5PytX6uy775cCseyUErI+bX0fVO p43rF0sDBD4fVo83Ab9zuA== 0000950152-97-005316.txt : 19970724 0000950152-97-005316.hdr.sgml : 19970724 ACCESSION NUMBER: 0000950152-97-005316 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19970627 FILED AS OF DATE: 19970723 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAYTON SUPERIOR CORP CENTRAL INDEX KEY: 0000854709 STANDARD INDUSTRIAL CLASSIFICATION: STEEL PIPE & TUBES [3317] IRS NUMBER: 310676346 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11781 FILM NUMBER: 97644290 BUSINESS ADDRESS: STREET 1: 721 RICHARD ST CITY: MIAMISBURG STATE: OH ZIP: 45342 BUSINESS PHONE: 5138660711 MAIL ADDRESS: STREET 1: 721 RICHARD ST CITY: MIAMISBURG STATE: OH ZIP: 45342 10-Q 1 DAYTON SUPERIOR CORPORATION FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED COMMISSION FILE NUMBER JUNE 27, 1997 1-11781 DAYTON SUPERIOR CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO 31-0676346 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 721 Richard Street Miamisburg, Ohio 45342 ---------------- ----- (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: 937-866-0711 ------------ NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES X NO --------- --------- 5,712,562 Common Shares were outstanding as of JULY 22, 1997 2 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS
DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 28, June 27, 1996 1997 ----------- ----------- (Unaudited) (Unaudited) ASSETS (Amounts in thousands) CURRENT ASSETS: Cash $638 $316 Accounts Receivable, net of allowance for doubtful accounts of $720 and $447 21,413 23,669 Inventories (Note 2) 15,538 18,855 Prepaid expenses 657 885 Prepaid income taxes 427 0 Future tax benefits 1,393 988 ----------- ----------- Total current assets 40,066 44,713 ----------- ----------- RENTAL EQUIPMENT, NET 1,587 2,807 ----------- ----------- PROPERTY, PLANT & EQUIPMENT: 30,258 33,438 Less accumulated depreciation (11,650) (14,957) ----------- ----------- Net property, plant & equipment 18,608 18,481 GOODWILL AND INTANGIBLE ASSETS, net of accumulated amortization 58,180 56,705 OTHER ASSETS 0 363 ----------- ----------- Total assets $118,441 $123,069 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt (Note 3) $3,282 $3,282 Accounts payable 13,965 12,202 Accrued compensation and benefits 4,114 4,428 Accrued liabilities 3,391 3,881 Due to Ripplewood Holdings LLC 611 0 Accrued interest 14 143 ----------- ----------- Total current liabilities 25,377 23,936 LONG-TERM DEBT (Note 3) 37,602 38,395 DEFFERED INCOME TAXES 2,663 2,470 OTHER LONG-TERM LIABILITIES 3,186 1,824 ----------- ----------- Total liabilities 68,828 66,625 ----------- ----------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Class A Common Shares 31,800 33,102 Class B Common Shares 10,123 9,749 Cumulative foreign currency translation adjust (141) (150) Excess pension liability (50) 0 Retained earnings 7,881 13,743 ----------- ----------- Total shareholders' equity 49,613 56,444 ----------- ----------- Total liabilities and shareholders' equity $118,441 $123,069 =========== ===========
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements 3
DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Fiscal Months Ended Six Fiscal Months Ended ------------------------- ----------------------- June 28, June 27, June 28, June 27, 1996 1997 1996 1997 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands, except share and per share amounts) NET SALES $36,461 $39,839 $60,076 $65,819 COST OF SALES 24,911 26,906 41,057 45,178 ----------- ----------- ----------- ----------- Gross profit 11,550 12,933 19,019 20,641 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 5,818 6,475 11,447 12,748 AMORTIZATION OF GOODWILL AND INTANGIBLES 426 468 832 925 ----------- ----------- ----------- ----------- Operating income 5,306 5,990 6,740 6,968 OTHER EXPENSES: Interest expense, net 1,594 797 3,179 1,483 Other, net (24) 0 (16) 11 ----------- ----------- ----------- ----------- Income before income taxes and extraordinary item 3,736 5,193 3,577 5,474 PROVISION FOR INCOME TAXES (1,470) (2,242) (1,712) (2,363) ----------- ----------- ----------- ----------- Net income before extraordinary item $2,266 $2,951 $1,865 $3,111 ----------- ----------- ----------- ----------- EXTRAORDINARY LOSS ON DEBT EXTINGUISHMENT (Note 6) ($2,314) $0 ($2,314) $0 ----------- ----------- ----------- ----------- NET INCOME/(LOSS) ($48) $2,951 ($449) $3,111 =========== =========== =========== =========== Income per share before extraordinary item $0.64 $0.51 $0.54 $0.53 ----------- ----------- ----------- ----------- Extraordinary item per share ($0.65) $0.00 ($0.67) $0.00 ----------- ----------- ----------- ----------- Net income/(loss) per share ($0.01) $0.51 ($0.13) $0.53 =========== =========== =========== =========== Weighted average common and common equivalent shares outstanding 3,562,794 5,838,646 3,449,278 5,829,466 =========== =========== =========== ===========
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. 4 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 28, 1996 and June 27, 1997
June 28, June 27, 1996 1997 ----------- ----------- (Unaudited) (Unaudited) (Amounts in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) ($449) $3,111 Adjustments to reconcile net income (loss) to net cash used in operating activities: Extraordinary loss on debt extinguishment 2,314 0 Depreciation 1,872 2,098 Amortization of goodwill and intangibles 832 925 Deferred income taxes (118) (224) Amortization of debt discount and deferred finanancing costs 136 82 Loss (gain) on sales of assets (6) 0 Change in assets and liabilities, net of the effects of acquisitions: Accounts receivable (7,455) (10,999) Inventories (2,267) (4,381) Rental equipment (539) (877) Accounts payable 4,626 4,295 Accrued liabilities (180) (349) Income tax payable (82) 2,510 Accrued interest (2,049) 69 Due to Ripplewood Holdings LLC 611 0 Other, net 564 (810) ----------- ----------- Net cash provided by/(used in) operating activities (2,190) (4,550) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Property, plant and equipment additions (1,255) (1,213) Proceeds from sales of assets 5 10 Other, net 0 (13) Acquisition of the net assets of Ironco Manufacturing and Steel Structures, Inc. (Notes 4 & 5) (3,800) (1,129) ----------- ----------- Net cash used in investing activities (5,050) (2,345) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of long-term debt, net 27,293 7,745 Repayment of long-term debt (40,000) (837) Prepayment premium on extinguishment of long-term debt (2,400) 0 Financing costs and fees (235) 0 Issuance of common stock 22,579 105 ----------- ----------- Net cash provided by financing activities 7,237 7,013 ----------- ----------- EFFECT OF EXCHANGE RATE CHANGES ON CASH (2) (5) ----------- ----------- Net increase/(decrease) in cash (5) 113 CASH, beginning of period 643 203 ----------- ----------- CASH, end of period $638 $316 =========== =========== SUPPLEMENTAL CASH FLOW DISCLOSURES: Cash paid for income taxes $502 $125 Cash paid for interest 5,091 1,341 Issuance of common stock in conjunction with acquisition (Note 4) 0 451
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements 5 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 28, 1996 AND JUNE 27, 1997 (Amounts in thousands, except for share amounts) (Unaudited) (1) Consolidated Financial Statements The interim consolidated financial statements included herein have been prepared by the Company, without audit, and include, in the opinion of management, all adjustments necessary to state fairly the information set forth therein. Any such adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these unaudited consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's annual financial statements for the year ended December 31, 1996. (2) Accounting Policies The interim consolidated financial statements have been prepared in accordance with the accounting policies described in the notes to the Company's consolidated financial statements for the year ended December 31, 1996. While management believes that the procedures followed in the preparation of interim financial information are reasonable, the accuracy of some estimated amounts is dependent upon facts that will exist or calculations that will be accomplished at year end. Examples of such estimates include changes in the LIFO reserve (based upon the Company's best estimate of inflation to date) and management bonuses. Any adjustments pursuant to such estimates during the fiscal quarter were of a normal recurring nature (a) Fiscal Quarter - The Company's fiscal quarters are defined as the periods ending on the last Friday in March, June and September. (b) Inventories - Substantially all finished products and raw materials are stated at the lower of last in, first out (LIFO) cost or market (which approximates current cost). Following is a summary of the components of inventories as of June 28, 1996 and June 27, 1997:
June 28, June 27, 1996 1997 ------- ------- Raw materials ........................... $ 5,095 $ 4,916 Finished goods .......................... 10,443 13,939 ------- ------- 15,538 18,855 LIFO reserve ............................ --- --- ------- ------- $15,538 $18,855 ======= =======
(3) Credit Arrangements On June 17, 1996, the Company entered into an Amended Credit Facility (as so amended, the "Amended Credit Facility") with Bank One, Dayton, NA and Bank of America Illinois (collectively, the "Banks"). The Amended Credit Facility provided for a Term Loan and a Revolving Credit Facility, each of 6 which will be secured by substantially all the assets of the Company. At June 27, 1997, $37,000 was available under the Revolving Credit Facility, of which $30,863 was outstanding at a weighted average interest rate of 7.3%. Average borrowings under the Revolving Credit Facility and its predecessors were $28,042 and $17,637 during the six fiscal months ended June 27, 1997 and June 28, 1996, respectively, at an approximate weighted average interest rate of 7.3% and 8.3%, respectively. The maximum borrowings outstanding during the six fiscal months ended June 27, 1997 and June 28, 1996, was $32,403 and $27,600, respectively. Following is a summary of the Company's long-term debt as of June 28, 1996 and June 27, 1997:
June 28, June 27, 1996 1997 ------- ------- Revolving lines of credit $27,600 $30,863 Term Loan, bearing a weighted average 13,000 10,562 interest rate of 7.43% City of Parsons, KS Economic Development Loan 284 252 ------- ------- Total long-term debt 40,884 41,677 Less current portion (3,282) (3,282) ------- ------- Long-term portion $37,602 $38,395 ======= =======
(4) Acquisition of the Net Assets of Ironco Manufacturing Co., Inc. and Birmingham Bar Coating Inc. On February, 21, 1997, the Company acquired certain of the assets and assumed certain of the liabilities of Ironco Manufacturing Co., Inc. and Birmingham Bar Coating Inc., privately held concrete paving products manufacturers. The purchase price, including acquisition related costs of $74, is $1,493 and was paid in cash of $1,147 and 26,254 Class A Common Shares. The acquisition has been accounted for as a purchase. The cash cost of the acquisition was funded through draws under the Revolving Credit Facility. This purchase price has been allocated on the basis of the agreed upon fair value of the assets acquired and liabilities assumed. (5) Acquisition of the Net Assets of Steel Structures, Inc. On April 29, 1996, the Company purchased, certain of the assets and assumed certain of the liabilities of Steel Structures, Inc., a privately held regional concrete paving products manufacturer based in Kankakee, IL. Steel Structures was an epoxy coater and fabricator of paving products and, prior to the acquisition, was both a major supplier of epoxy coating to the Company and competitor in its concrete paving product line. Certain of the Company's existing paving manufacturing equipment has been relocated from another plant to the former Steel Structures facility in Kankakee. The acquisition is being operated by the Company under the name American Highway Technology. As of June 27, 1997, the Company has paid $5,201 of the $5,601 purchase price with the balance due by April 1998. The acquisition has been accounted for as a purchase and the results of American Highway Technology have been included in the accompanying consolidated financial statements since the date of acquisition. The cost of the acquisition was funded through draws under the Revolving Credit Facility. This purchase price has been allocated on the basis of appraised fair value of the assets acquired of $6,113, including goodwill of $1,374, and liabilities assumed of $512. 7 (6) Extraordinary loss on Debt Extinguishment In June 1996, the Company extinguished its $40,000 of unsecured promissory notes. In conjunction therewith, the Company paid a prepayment premium of $2,400 and expensed unamortized finance costs and debt discount of $795 and $538, respectively. The Company recorded an extraordinary loss of $2,314, net of an income tax effect of $1,419. The Company funded this repayment with $22,358 in proceeds from its public stock offering and its Amended Credit Facility. (7) Public Offering of Company Shares On June 20 ,1996, the Company completed an initial public offering of Company 1,974,750 shares of Class A Common Shares and received proceeds of $22,654, net of expenses. On July 16, 1996, the underwriters of the Company's initial public offering of Class A Common Shares exercised a portion of their over-allotment option pursuant to which the Company issued 56,200 shares of Class A Common Shares and Ripplewood Holdings LLC converted 56,200 shares of its Class B Common Shares into Class A Common Shares and sold those shares. The Company's proceeds of $683 from the issuance of those shares were used to reduce the outstanding balance of the Revolving Credit Facility. (8) Stock Option Plans The Company has five stock option plans all of which provide for an option exercise price equal to the stock's market price on the date of grant and all of which are accounted for under APB Opinion No. 25, under which no compensation costs has been recognized. Had compensation cost for these plans been determined with Statement of Financial Accounting Standards No.123, "Accounting for Stock-Based Compensation" ("SFAS 123"), the Company's net income and earnings per share for the six fiscal months of 1996 and 1997 would have been reduced to the following pro forma amounts:
Three fiscal months Six fiscal months ------------------- ----------------- ended ended ----- ----- June 28, June 27, June 28, June 27, -------- -------- -------- -------- 1996 1997 1996 1997 ---- ---- ---- ---- Net Income As Reported ($48) $2,951 ($449) $3,111 Pro Forma ( 53) 2,920 ( 460) 3,069 Income per Share As Reported ($0.01) $0.51 ($0.13) $0.53 Pro Forma ( 0.01) 0.50 ( 0.13) 0.53
Because the SFAS 123 method of accounting has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation cost may not be representative of that to be expected in future years. 8 The Company may grant options of up to 40,000 shares under the 1997 Nonemployee Directors Stock Option Plan and up to 240,000 shares under the 1997 Stock Option and Restricted Stock Plan. A summary of the status of the Company's stock option plans for the six months ended June 27, 1997 is presented in the table below:
Weighted Average Exercise Number of Shares Price Per Share Outstanding at 12/31/96 297,750 $ 3.11 Granted 6,000 12.63 ----- ----- Outstanding at 06/27/97 303,750 $ 3.30 ======= ======
(9) Recent Accounting Pronouncements In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 128 "Earnings per Share." This standard is effective for both interim and annual periods ending after December 15, 1997. If the earnings per share were calculated in accordance with SFAS 128, the Company's income (loss) per share would be as follows:
Three fiscal months ended Six fiscal months ended ------------------------- ----------------------- June 28, 1996 June 27, 1997 June 28, 1996 June 27, 1997 ------------- ------------- ------------- ------------- Basic ($0.01) $0.52 ($0.13) $0.55 Diluted ( 0.01) 0.51 ( 0.13) 0.53
9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Dayton Superior Corporation (the "Company") achieved record second quarter 1997 net sales of $39.8 million, which were 9.0% higher than net sales in the second quarter of 1996. The Company's second quarter sales by major product category during the last two years were:
DOLLARS IN MILLIONS THREE FISCAL MONTHS ENDED SIX FISCAL MONTHS ENDED - ------------------- ------------------------- ----------------------- JUNE 27, 1997 JUNE 28, 1996 JUNE 27, 1997 JUNE 28, 1996 ------------- ------------- ------------- ------------- Concrete Products $23.3 $21.5 $40.6 $37.0 Paving Products 9.2 7.6 12.8 10.7 Masonry Products 7.3 7.4 12.4 12.4 --- --- ---- ---- Net Sales $39.8 $36.5 $65.8 $60.1 ===== ===== ===== =====
Net sales of concrete products increased by $1.8 million, or 8.4%, to $23.3 million in the second quarter of 1997 due to strong market demand, especially in the rental and tilt-up markets. Net sales of paving products increased $1.6 million, or 21.1%, to $9.2 million in the second quarter of 1997 due to the acquisition of Ironco Manufacturing Co., Inc. in February 1997 and higher than expected customer demand. Net sales of masonry products decreased slightly in the second quarter compared to last year, with a 1.4% decrease. The masonry product market is currently very price competitive, particularly in the hot dipped and mill galvanized masonry wall reinforcement markets. Income before taxes and extraordinary item was $5.2 million in the second quarter of 1997 compared to $3.7 million in the second quarter of 1996. Interest expense decreased by $0.8 million, or 50.0%, in the second quarter of 1997 from the same period last year as the Company used the proceeds from its initial public offering in June 1996 to reduce debt levels and to negotiate favorable interest rates. Net income for the second quarter of 1997 was $3.0 million, or $0.51 per share, compared to a loss of $0.05 million, or $0.01, per share in the second quarter of 1996. IMPLEMENTATION OF BUSINESS STRATEGY To strengthen its position in concrete paving products, in February 1997, the Company acquired the principal assets of Ironco Manufacturing Co., Inc. and Birmingham Bar Coating, Inc. Operations remained in Birmingham, AL under the name Ironco Manufacturing, as part of the Company's American Highway Technology division. On May 9, 1997, Dayton Superior announced a definitive agreement to acquire Symons Corporation for an estimated total purchase price of $79 million. Symons is comprised of two divisions, Symons and Richmond Screw Anchor. Symons is a leading manufacturer of prefabricated concrete forms, while Richmond Screw Anchor is a manufacturer of concrete accessories. These businesses complement and broaden the 10 Company's product lines. See Part II, Item 1 of this report. RESULTS OF OPERATIONS The following table summarizes the Company's results of operations as a percentage of net sales.
THREE FISCAL MONTHS SIX FISCAL MONTHS ------------------- ----------------- ENDED ENDED ----- ----- JUNE 27, JUNE 28, JUNE 27, JUNE 28, -------- -------- -------- -------- 1997 1996 1997 1996 ---- ---- ---- ---- Net sales 100.0 100.0 100.0 100.0 Cost of goods sold 67.5 68.3 68.7 68.3 -------- -------- -------- ------- Gross profit 32.5 31.7 31.3 31.7 Selling, general and administrative expenses 16.3 16.0 19.4 19.1 Amortization of goodwill and intangibles 1.2 1.2 1.4 1.4 -------- -------- -------- ------- Operating income 15.0 14.5 10.5 11.2 Interest expense, net 2.0 4.4 2.2 5.3 Other, net -- (0.1) -- (0.1) -------- -------- -------- ------- Income before income taxes 13.0 10.2 8.3 6.0 Provision for income taxes 5.6 4.0 3.6 2.9 -------- -------- -------- ------- Net income before extraordinary item 7.4 6.2 4.7 3.1 Extraordinary item -- (6.3) -- (3.8) -------- -------- -------- ------- Net income/(loss) 7.4 (0.1) 4.7 (0.7) ======== ======== ======== =======
- ------------------------------ COMPARISON OF THREE FISCAL MONTHS ENDED JUNE 27, 1997 AND JUNE 28, 1996 NET SALES Net sales increased $3.3 million, or 9.0%, from $36.5 million in the second quarter of 1996 to $39.8 million in the second quarter of 1997. Net sales of concrete products increased by 8.4% from $21.5 million in the second quarter of 1996 to $23.3 million in the second quarter of 1997, due to strong performance in our rental and tilt-up product lines, and, to a lesser extent, new product sales. Net sales of paving products increased $1.6 million, or 21.1% from the second quarter of 1996 to the second quarter of 1997. The acquisition of the assets of Ironco Manufacturing Co., Inc. in February 1997 and strong demand from customers drove the increase. Net sales of masonry products decreased $0.1 million, to $7.3 million in the second quarter of 1997 compared to the second quarter 1996 levels. Competition continues at a high level in the hot dipped and mill galvanized masonry wall reinforcement product markets. GROSS PROFIT Gross profit for the second quarter of 1997 was $12.9 million, a 11.2% increase over $11.6 million from the second quarter of 1996. As a percent of net sales, gross margin was 32.5% in the second quarter of this year, up from 31.7% last year. The increase in gross margin was caused by the following primary factors: a favorable mix within the concrete products category to higher margin products and higher margins on paving and masonry products. 11 OPERATING EXPENSES SG&A expenses (excluding the amortization of goodwill and intangibles) were up slightly as a percent of net sales from 16.0% in the second quarter of last year, to 16.3% in the second quarter of this year. SG&A expenses increased $0.7 million, or 12.1%, from $5.8 million in the second quarter of 1996, to $6.5 million in the second quarter of 1997. The increase resulted from incurring costs associated with being a publicly owned company and building and strengthening the new American Highway Technology Division. American Highway Technology locations in Kankakee, IL and Birmingham, AL were added in April 1996 and February 1997. Interest expense decreased $0.8 million from $1.6 million in the second quarter 1996, to $0.8 million in the second quarter 1997. The Company used the proceeds from its initial public offering in June 1996 to reduce debt levels which also facilitated more favorable interest rates. Income before income taxes and extraordinary item increased $1.5 million to $5.2 million in the second quarter 1997 compared to $3.7 million in the second quarter of 1996. The difference in effective tax rates from statutory rates is due to nondeductible goodwill amortization. COMPARISON OF SIX FISCAL MONTHS ENDED JUNE 27, 1997 AND JUNE 28, 1996 NET SALES For the first six months of 1997, net sales were a record $65.8 million, a 9.5% increase from $60.1 million in 1996. Net sales of concrete products increased by $3.6 million, or 9.7%, to $40.6 million in 1997 due to strong heavy construction activity in the U.S. and to a lesser extent, new product sales of concrete accessories. Net sales of paving products increased $2.1 million, or 19.6%, in the first half from $10.7 million in 1996 to $12.8 million in 1997. The acquisition of Ironco Manufacturing Co., Inc. in February 1997 and the strong demand from customers drove the increase. Net sales of masonry products were flat at $12.4 million for both periods. Competition is strong in the hot dipped and mill galvanized masonry wall reinforcement product markets. GROSS PROFIT Gross profit for the first half of 1997 was $20.6 million, a 8.4% increase over $19.0 million for the first half of 1996. As a percent of net sales, gross margin was 31.3% in the first half of 1997, compared to 31.7% in the first half of 1996. The gross margin decreased slightly as a result of lower margins on the masonry products and increasing paving product sales, which traditionally command a lower margin than concrete products. OPERATING EXPENSES SG&A expenses (excluding the amortization of goodwill and intangibles) were up slightly as a percent of net sales from 19.1% in the first half of 1996 to 19.4% in the first half of 1997. SG&A expenses increased $1.3 million, or 11.4% from $11.4 million in the 12 six months of 1996 to $12.7 million in the first half of 1997. The increase resulted from incurring costs associated with being a publicly owned company and costs to build and strengthen a new division-American Highway Technology. INTEREST AND OTHER EXPENSES Interest expense decreased $1.7 million from $3.2 million in the first half of 1996 to $1.5 million in the first half of 1997. The Company used the proceeds from the initial public offering in June 1996 to reduce debt levels which also facilitated more favorable interest rates. NET INCOME Income before income taxes and extraordinary item increased $1.9 million to $5.5 million in the first half of 1997 compared to $3.6 million in the first half of 1996. The difference in effective tax rates from statutory rates is due to nondeductible goodwill amortization. Net income in the first half of 1997 was $3.1 million, or $0.53, per share compared to a loss $0.5 million, or $0.13, per share in the first half of 1996. LIQUIDITY AND CAPITAL RESOURCES The Company's capital requirements relate primarily to capital expenditures, debt service and the cost of acquisitions. Historically, the Company's primary sources of financing have been cash from operations, borrowings under its revolving line of credit and the issuance of long-term debt and equity. Net cash used in operating activities in the first half of 1997 was $4.6 million. Net income before non-cash charges of depreciation, amortization and deferred taxes provided $5.9 million of operating cash flow. Working capital growth used $10.5 million of operating cash flow. Significant working capital uses included seasonal increases in accounts receivable and inventory of $11.0 million and $4.4 million, net of acquisitions, respectively. Accounts payable grew by $4.3 million in the first half of 1997 due to normal seasonal expansion. Net cash generated from draws on the line of credit funded the seasonal increases in operating activities, investments in property, plant and equipment, the acquisition of the principal assets of Ironco Manufacturing Co., Inc., and Birmingham Bar Coating Inc., and the scheduled term loan repayments. At June 27, 1997, working capital was $20.8 million, compared to $14.7 million at June 28, 1996. The growth in working capital is primarily attributable to acquisitions and growth in the base business. In June 1996, the Company entered into an Amended Credit Facility to provide for term loans to the Company and Dur-O-Wal (together, the "Term Loan") and revolving credit facilities for the Company and Dur-O-Wal (together, the "Revolving Credit Facility"), each of which is secured by substantially all the assets of the Company and Dur-O-Wal. At June 27, 1997, $37.0 million of the $37.0 million Revolving Credit Facility was 13 available, of which $30.9 million of borrowings were outstanding. The Term Loan had an outstanding balance at June 27, 1997 of $10.6 million. At June 27, 1997, the Company had $41.7 million of long-term debt outstanding, of which $3.3 million was current. Net borrowings during the first half of 1997 were $6.9 million. The Company's debt to total capitalization ratio decreased from 43.1% in June 1996 to 40.5% in June 1997 primarily as a result of increased equity from earnings. The Company invested $1.2 million in property, plant and equipment additions during the first six months of 1997, consistent with the investment in the first six months of 1996. Significant investments were made in equipment to further improve efficiencies and expand capacity in the concrete paving product line, concrete chemical product line and masonry accessory product line. On February 21, 1997, the Company acquired certain of the assets of Ironco Manufacturing Co., Inc. and Birmingham Bar Coating Inc., privately held concrete paving products manufacturers. The purchase price, including acquisition related costs, was $1.5 million and was paid in cash and Class A Common Shares. The acquisition was accounted for as a purchase. The cash cost of the acquisition was funded through draws under the Revolving Credit Facility. The purchase price was allocated on the basis of the agreed upon fair value of the assets acquired and liabilities assumed. The Company believes its liquidity, capital resources and cash flows from operations are sufficient to fund planned capital expenditures, working capital requirements and debt service in absence of additional acquisitions. The Company intends to fund future acquisitions with cash, securities or a combination of cash and securities. To the extent the Company uses cash for all or part of any such acquisitions, it expects to raise such cash primarily from cash generated from operations, borrowings under the Amended Credit Facility or, if feasible and attractive, issuances of long-term debt or additional Class A Common Shares. SEASONALITY The Company's operations are seasonal in nature with approximately 60% of sales historically occurring in the second and third quarters. Working capital and borrowings fluctuate with sales volume. Historically more than 50% of cash flow from operations is generated in the fourth quarter. INFLATION The Company does not believe inflation had a significant impact on its operations over the past three years. In the past, the Company has been able to pass along all or a portion of the effects of steel price increases. There can be no assurance the Company will be able to continue to pass on the cost of such increases in the future. RECENTLY ISSUED ACCOUNTING STANDARDS In October 1996, the American Institute of Certified Public Accountants issued 14 Statement of Position 96-1, "Environmental Remediation Liabilities" ("SOP 96-1"). As described in footnote 2(f) of the December 31, 1996 consolidated financial statements, the Company adopted the provisions of SOP 96-1 on January 1, 1997. The adoption did not have a material impact on the Company's financial position or results of operations. In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 128 "Earnings per Share." This standard is effective for both interim and annual periods ending after December 15, 1997. FORWARD-LOOKING STATEMENTS This Form 10-Q includes, and future filings by the Company on Form 10-K, Form 10-Q and Form 8-K and future oral and written statements by the Company and its management may include, certain forward-looking statements, including (without limitation) statements with respect to anticipated future operating and financial performance, growth opportunities and growth rates, acquisition and divestitive opportunities and other similar forecasts and statements of expectation. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and "should," and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements by the Company and its management are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information, or otherwise. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as the result of a number of important factors. Representative examples of these factors include (without limitation) the cyclical nature of nonresidential building and infrastructure construction activity, which can be affected by factors outside the Company's control such as the general economy, governmental expenditures and changes in banking and tax laws; the Company's ability to successfully identify, finance, complete and integrate acquisitions; the mix of products sold by the Company; the Company's ability to successfully develop and introduce new products; increases in the price of steel (the principal raw material in the Company's products) and the Company's ability to pass along such price increases to its customers; and the seasonality of the construction industry. In addition to these factors, actual future performance, outcomes and results may differ materially because of other, more general, factors including (without limitation) general industry and market conditions and growth rates, domestic economic conditions, governmental and public policy changes and the continued availability of financing in the amounts, at the terms and on the conditions necessary to support the Company's future business. 15 PART II-OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On April 22, 1997, the Company announced it had entered into a letter of intent to acquire all of the outstanding stock of Symons Corporation ("Symons"). Symons and the Company filed Notification and Report Forms with respect to the acquisition with the Federal Trade Commission and the Antitrust Division of the Department of Justice by April 24, 1997, and the thirty day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), began on April 24, 1997. On May 9, 1997, the Company, Symons and the stockholders of Symons entered into a definitive agreement with respect to the previously-announced acquisition. On May 23, 1997, the Company received a request from the Antitrust Division of the United States Department of Justice for additional information and documents with respect to the acquisition pursuant to the HSR Act. This request extends the waiting period under the HSR Act, during which the acquisition may not be consummated, for 20 days from the date the requested materials are provided. The Company currently is responding to this request. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders of DAYTON SUPERIOR CORPORATION was held on May 8, 1997. The following votes were cast by the holders of Class A Common Shares and Class B Common Shares for the nominees listed below to hold the office of director and such nominees were elected:
VOTES FOR VOTES WITHHELD - ----------------------------------------------------------------------------- William F. Andrews 17,599,642 53,200 John A. Ciccarelli 17,599,642 53,200 Timothy C. Collins 17,599,642 53,200 Matthew O. Diggs, Jr. 17,599,642 53,200 Matthew M. Guerreiro 17,599,642 53,200 Robert B. Holmes 17,599,642 53,200
The following votes were cast by the holders of Class A Common Shares and Class B Common Shares with respect to approval of the 1997 Stock Option and Restricted Stock Plan:
VOTES FOR VOTES AGAINST VOTES ABSTAINED UNVOTED - ----------------------------------------------------------------------------------- 16,928,418 393,620 58,750 272,054
The following votes were cast by the holders of Class A Common Shares and Class B Common Shares with respect to approval of the 1997 Nonemployee Director Stock Option Plan:
VOTES FOR VOTES AGAINST VOTES ABSTAINED UNVOTED - ----------------------------------------------------------------------------------- 17,126,573 201,420 58,700 266,149
16 ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) See Exhibit Index following the signature page to this report. (b) Reports on Form 8-K. The Company filed the following Current Reports on Form 8-K during the quarter ended June 27, 1997:
DATE OF REPORT ITEMS REPORTED April 21, 1997 Execution of a letter of intent dated April 21, 1997 with repect to the acquisition by the Company of Symons Corporation. April 24, 1997 Execution on May 9, 1997 of definitive agreement with respect to the acquisition by the Company of Symons Corporation and receipt of a request for additional information and documents with respect to the acquisition by the Antitrust Division of the United States Department of Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
17 SIGNATURES - ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the REgistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DAYTON SUPERIOR CORPORATION --------------------------- DATE: July 22, 1997 BY: /s/ Vinod M. Khilnani -------------------------- ------------------------ Vinod M. Khilnani Vice President and Chief Financial Officer (Principal Financial Officer) /s/ Richard L. Braswell ------------------------ Richard L. Braswell Vice President Finance and Treasurer (Principal Accounting Officer) 18 INDEX TO EXHIBITS ----------------- (10) Material Contracts 10.1 1997 Stock Option and Restricted Stock Plan 10.2 1997 Nonemployee Director Stock Option Plan 10.3 Nonemployee Directors Compensation Program (11) Statement Re: Computation of Earnings Per Share: 11.1 Computation of Earnings Per Share (27) Financial Data Schedule ______________________ EX-10.1 2 EXHIBIT 10.1 1 Exhibit 10.1 DAYTON SUPERIOR CORPORATION 1997 STOCK OPTION AND RESTRICTED STOCK PLAN ------------------------------------------- 1. PURPOSE. The purpose of the Plan is to enable the Company to continue to attract, retain and motivate those officers and other key employees of the Company whose substantial contributions are essential to the growth and success of the Company's business with a long-term incentive that effectively is tied to the performance of the Company and shareholder value. 2. DEFINITIONS. For purposes of this Plan: "AGREEMENT" means a written agreement between the Company and a Holder evidencing the grant of an Option and setting forth the terms and conditions of the Option or evidencing the grant of Restricted Shares and setting forth the terms and conditions of the Restricted Shares. "BOARD" means the Board of Directors of the Company. "CAUSE" means (i) the willful neglect by the Holder of, or the refusal by the Holder to perform, the Holder's duties or responsibilities, or any willful act by the Holder which materially impairs the ability of the Holder to perform the Holder's duties or responsibilities and which act continues after being brought to the attention of the Holder (other than any such failure resulting from the Holder's incapacity due to physical or mental illness), or (ii) any willful act or failure to act by the Holder which is materially injurious to the Company. "CHANGE IN CAPITALIZATION" means any increase, reduction or change or exchange of Shares for a different number or kind of shares or other securities of the Company by reason of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants or rights, stock dividend, stock split or reverse stock split, combination or exchange of shares, repurchase of shares, change in corporate structure or otherwise. "CHANGE OF CONTROL" means a change of control after the date this Plan becomes effective of a nature that would be required to be reported in response to Item 6(e) of Schedule 14 of Regulation 14A promulgated under the Exchange Act or any similar successor disclosure provisions. Without limiting the foregoing, a Change of Control shall be deemed to have occurred for purposes of the Plan regardless of the provisions of the Exchange Act, if (i) any "person," as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act (excluding, for this purpose, the Company, any subsidiary of the Company, any employee benefit plan of the Company or any such subsidiary, Ripplewood or any affiliate of Ripplewood), including any "group" of persons, becomes the beneficial owner (as determined in 2 accordance with Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company which, together with any other securities of the Company theretofore directly or indirectly beneficially owned by such person, represent 20% or more of the combined voting power of the Company's then outstanding securities; or (ii) at any election or series of elections, persons not proposed for nomination or nominated by the Board are elected as directors of the Company and together constitute 50% or more of the Board. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMITTEE" means the Compensation and Benefits Committee or other committee of the Board to which the Board has delegated administration of the Plan or, in the absence of such delegation, the Board. "COMMON SHARES" means any class of common shares of the Company. "COMPANY" means Dayton Superior Corporation, an Ohio corporation; provided, however, that when used herein in connection with the employment of any Person, "COMPANY" also shall include any subsidiary of the Company. "DISABILITY" has the meaning ascribed to such term in the Company's disability program as in effect at the time. "ELIGIBLE EMPLOYEE" means any officer or other key employee of the Company designated by the Committee as eligible to receive Options or Restricted Shares subject to the conditions set forth herein. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "FAIR MARKET VALUE" means the average of the highest sale price and the lowest sale price of a Share on the date the value of a Share is to be determined, as reported on the New York Stock Exchange and published in the WALL STREET JOURNAL or, if no sale is reported for such date, then on the next preceding date for which a sale is reported or, if the Shares no longer are traded on the New York Stock Exchange, such value as shall be determined by the Committee in good faith. "HOLDER" means a Person to whom an Option or Restricted Shares have been granted or any permitted transferee of any such Option or Restricted Shares under the terms of the Plan. "INCENTIVE STOCK OPTION" means an Option granted under the Plan which qualifies as an incentive stock option under Section 422 of the Code. "NONQUALIFIED OPTION" means an Option granted under the Plan which by its terms does not qualify as an Incentive Stock Option. 3 "OPTION" means a right to purchase Shares granted under the Plan. An Option may be a Nonqualified Option or an Incentive Stock Option. "PERSON" means a corporation, an association, a partnership, an organization, a business, an individual, a government or a subdivision thereof or a governmental agency. "PLAN" means this 1997 Stock Option and Restricted Stock Plan, as amended from time to time. "QUALIFIED DOMESTIC RELATIONS ORDER" means a qualified domestic relations order as defined in Section 414(p)(1)(B) of the Code which satisfies the conditions of Section 414(p)(1)(A) of the Code. "RESTRICTED SHARES" means Shares granted under the Plan which are subject to a risk of forfeiture and which may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of until certain conditions specified by the Committee have been satisfied. "RETIREMENT" has the meaning ascribed to such term in the Company's retirement program as in effect at the time. "RIPPLEWOOD" means Ripplewood Holdings L.L.C., a Delaware limited liability company. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SHAREHOLDER AGREEMENT" means that certain Amended and Restated Shareholder Agreement, as amended, among the Company, Ripplewood and certain other shareholders of the Company, as the same may be further amended from time to time. "SHARES" means the Class A Common Shares, without par value, of the Company (including any new, additional or different shares or securities resulting from a Change in Capitalization). "TAX DATE" means the date as of which the amount of a withholding tax payment with respect to the exercise of an Option or with respect to Restricted Shares is calculated. 3. ADMINISTRATION. (a) The Plan shall be administered by the Committee. A majority of the members of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee shall constitute the act of the Committee. Any action reduced to writing and signed by all of the members of the Committee shall be as fully effective as if it had been taken at a meeting. 4 (b) Subject to the express terms and conditions set forth in the Plan, the Committee shall have the power from time to time: (i) to determine those Eligible Employees to whom Options and Restricted Shares are granted under the Plan and the number of Options and/or Restricted Shares to be granted to each and to prescribe the terms and conditions (which need not be identical) of each Option, including the exercise price per Share of each Option, and of each Restricted Share; (ii) to construe and interpret the terms of the Plan, the Options and the Restricted Shares including, without limitation, to correct any defect or omission or to reconcile any inconsistency in the Plan or in any Agreement and to establish, amend and revoke rules and regulations for the administration of the Plan, in the manner and to the extent the Committee deems necessary or advisable to make the Plan fully effective (and all decisions and determinations by the Committee in the exercise of this power shall be final and binding upon the Company and each Holder); (iii) to determine the duration and permitted purposes for any leave of absence which may be granted to a Holder without constituting a termination of the Holder's employment for purposes of the Plan; (iv) to authorize the payment to a Holder, but only with the consent of the Holder, in exchange for the cancellation of all or part of an Option held by the Holder, of cash in an amount not to exceed the difference between the aggregate Fair Market Value of the Shares with respect to which the Option is being canceled (as of the effective date of such cancellation) and the aggregate exercise price of the Option being cancelled; and (v) generally, to exercise such powers and to perform such acts as the Committee deems necessary or advisable to promote the best interests of the Company with respect to the Plan. 4. SHARES SUBJECT TO THE PLAN. (a) The maximum number of Shares that may be issued or delivered pursuant to Options granted under the Plan or granted as Restricted Shares under the Plan is 240,000, subject to adjustment as provided in Section 9. Such Shares may be authorized but unissued Shares or Shares held in treasury. The Company shall reserve, for purposes of the Plan, out of its authorized but unissued Shares or treasury Shares, or partly out of each, such number of Shares as shall be determined by the Board. (b) Whenever any outstanding Option or any portion of an outstanding Option expires, is canceled or otherwise terminates (other than by exercise) or whenever any Restricted Share is forfeited, the Shares subject to the unexercised portion of the Option which has expired, been canceled or has terminated or the Restricted Share which is forfeited again shall be available for the grant of Options and Restricted Shares hereunder without reducing the number of Shares otherwise 5 available under the Plan. Shares which have been surrendered to or withheld by the Company to satisfy all or a portion of the purchase price of an Option or a tax withholding obligation with respect to an Option or Restricted Shares thereafter shall not be available under the Plan. 5. OPTIONS. The terms and conditions of each Option granted under the Plan shall be set forth in an Agreement. The terms of any Option may differ from the terms of other Options granted under the Plan at the same time or at any other time. The Committee may grant more than one Option to a Person during the term of the Plan, either in addition to, or in substitution for, one or more Options previously granted to that Person; provided, however, that the maximum aggregate number of Shares as to which Options may be granted under the Plan to any Person during the term of the Plan is 50,000. Each Option and Agreement shall be subject to the following conditions: (a) EXERCISE PRICE. No Option may be granted under the Plan with an exercise price per Share which is less than the Fair Market Value of a Share on the date the Option is granted. (b) DURATION. Options shall be for such term as the Committee determines at the time the Option is granted; provided, however, that no Option shall be exercisable for a period of more than ten years from the date the Option is granted. Subsequent to the granting of an Option with a term of less than ten years, the Committee may extend the term of the Option to any date before the tenth anniversary of the date of grant. (c) NON-TRANSFERABILITY. Unless otherwise provided in the Agreement with respect to an Option, no Option granted under the Plan shall be pledged, assigned, hypothecated or transferred by the Holder other than by will or the laws of descent and distribution. Nonqualified Options also may be transferred pursuant to a Qualified Domestic Relations Order. Options may be exercised during the lifetime of a Holder only by the Holder or the Holder's guardian or legal representative. With the consent of the Committee, a Holder may designate a person or persons to receive, in the event of such Holder's death, an Option or portion of an Option held by the Holder at the time of death or any amount payable with respect thereto to which the Holder then would be entitled. (d) EXERCISABILITY. Subject to acceleration as provided in Section 5(e), at the time an Option is granted the Committee may provide that the Option may be exercised in full or in part only after the passage of a specified period or periods of time following the date of grant or only if specified conditions have been satisfied. The Committee may accelerate the exercisability of any Option or any portion of an Option at any time. Subject to the ten-year limitation set forth in Section 5(b), the Committee may waive or modify at any time, either before or after an Option is granted, any condition, limitation or restriction with respect to the exercise of such Option imposed by or pursuant to this Section 5 or Section 6 in such circumstances as the Committee, in its discretion, may deem appropriate; provided, however, that any such waiver or modification with respect to an outstanding Option shall be subject to the limitations applicable to amendments to outstanding Options set forth in Section 5(j). 6 (e) ACCELERATION OF EXERCISABILITY. Notwithstanding Section 5(d), unless otherwise provided in the Agreement with respect to an Option, each Option shall become immediately exercisable upon a Change of Control, upon the death or Disability of the Holder of the Option or upon the Retirement of the Holder of the Option, if at the time of such Retirement the Holder is age 65 or older. (f) TERMINATION OF EMPLOYMENT. (i) Unless otherwise set forth in the Agreement with respect to an Option, if the original Holder of an Option ceases to be employed by the Company, all Options held by the Holder or any permitted transferee shall terminate as follows: (A) If the termination of the Holder's employment is due to death, Disability or Retirement, each Option held by the Holder shall continue to be exercisable (to the extent exercisable at the time the Holder's employment terminates, including as a result of any acceleration in accordance with Section 5(e)) by the Holder, the Holder's estate or any person who acquired the right to exercise the Option by bequest, inheritance or designation permitted by Section 5(c) for a period of one year following such termination of employment (but, in no event, beyond the original term of the Option), at the end of which period the Option shall terminate in full; (B) If the termination of the Holder's employment is for any reason other than death, Disability, Retirement or Cause, each Option held by the Holder shall continue to be exercisable (to the extent exercisable at the time the Holder's employment terminates) for a period of 90 days following such termination of employment (but, in no event, beyond the original term of the Option), at the end of which period the Option shall terminate in full; (C) If the Holder's employment is terminated by the Company for Cause, each Option held by the Holder, whether exercisable or not, shall be terminated in full upon such termination of employment; and (D) If the Holder dies following termination of the Holder's employment but during the period in which an Option held by the Holder continues to be exercisable in accordance with this Section 5(f), such Option shall continue to be exercisable (to the extent exercisable at the time of Holder's death) by the Holder's estate or by the person who acquired the right to exercise the Option by bequest, inheritance or designation permitted by Section 5(c) for a period of one year following the date of the Holder's death (but, in no event, beyond the original term of the Option). Notwithstanding the foregoing, the Committee may provide, at the time an Option is granted or thereafter, that an Option may be exercised after the periods provided for in this Section 5(f) (but, in no event, beyond the original term of the Option). (ii) At any time that a Holder has the right to exercise an Option during a period following termination of employment in accordance with clause (A), (B) or (D) of Section 5(f)(i), 7 the Company shall have the right to cancel the Option by so notifying the Holder in writing and agreeing to pay to the Holder, within 10 days, an amount equal to the number of Shares subject to the Option multiplied by the amount, if any, by which the Fair Market Value of a Share determined as of the date the Company gives such notice exceeds the exercise price per Share of the Option. (g) EXERCISE OF OPTION. (i) An Option may be exercised only by a written notice delivered to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor and otherwise in accordance with the Agreement. The exercise price for the Shares to be purchased pursuant to the exercise of an Option shall be paid in full upon such exercise in cash, by check, or, at the discretion of the Committee and upon such terms and conditions as the Committee may approve, by transferring Shares to the Company or by the retention by the Company of Shares to be issued upon the exercise of such Option, or any combination thereof. Any Shares transferred to the Company or retained by the Company as payment of the exercise price of an Option shall be valued at their Fair Market Value on the date the Option is exercised. If required by the Committee, the Holder shall deliver the Agreement evidencing the Option to the Secretary of the Company, who shall endorse on the Agreement a notation of such exercise and shall return such Agreement to the Holder. Any exercise of an Option for fewer than all of the Shares covered by the Option shall be for at least ten Shares. No fractional Shares shall be issued upon the exercise of an Option. (ii) If the Plan or any law, regulation or interpretation requires the Company to take any action regarding the Shares before the Company issues certificates for the Shares being purchased, the Company may delay delivering the certificates for the Shares for the period necessary to take such action; provided, however, that the Company shall use its reasonable best efforts to promptly take any such action. The certificate or certificates representing Shares acquired upon the exercise of an Option may bear a legend restricting the transfer of such Shares to the extent required by applicable law, regulation or interpretation, and the Company may impose stop transfer instructions to implement such restrictions, if applicable. (h) RIGHTS OF HOLDER. No Holder shall be deemed for any purpose to be the owner of any Shares subject to an Option unless and until the Option has been validly exercised, the Company has issued and delivered certificates for the Shares to the Holder, and the Holder's name has been entered as a shareholder of record on the books of the Company. (i) SHAREHOLDER AGREEMENT. Unless otherwise expressly provided in the Agreement at the time an Option is granted, if a Holder who is not bound by the terms of the Shareholder Agreement exercises an Option, the Holder shall become a party to, and shall become bound by, the Shareholder Agreement and shall execute any instrument which the Committee reasonably determines is necessary for such purpose. Upon the exercise of an Option by a Holder who is already bound by the terms of the Shareholder Agreement, the Shares acquired by the Holder shall be subject to the Shareholder Agreement, and the Holder shall execute any instrument which the Committee reasonably determines is necessary for such purpose. 8 (j) AMENDMENT OF OPTIONS. Subject to the terms and provisions of the Plan, the Committee may amend any outstanding Option in any respect; provided, however, that (i) no such amendment shall reduce the exercise price of the Option (except to set forth an adjustment in the exercise price made pursuant to Section 9), and (ii) the consent of the Holder of the Option to such amendment must be obtained if the amendment would adversely affect the rights of the Holder under the Option. (k) CERTAIN OPTION EXERCISES PROHIBITED. No Holder of an Option shall make any elective contribution or employee contribution (as defined for purposes of Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4)) to the Plan (i.e., an exercise of an Option with cash or check) during the 12- month period after the Holder's receipt of a deemed hardship distribution (as defined for purposes of Treasury Regulation Section 1.401(k)-1(d)(2)(iv)) from a plan of the Company (or of a related party, as defined for purposes of Code Section 414(b), (c), (m) or (o)) which contains a cash or deferred arrangement under Section 401(k) of the Code; provided, however, that the foregoing shall not apply if and to the extent that the Committee determines it is not necessary to qualify any such plan as a cash or deferred arrangement under Section 401(k) of the Code. 6. ADDITIONAL PROVISIONS APPLICABLE TO INCENTIVE STOCK OPTIONS. (a) The following additional terms and provisions shall apply to all Incentive Stock Options granted under the Plan, notwithstanding any provision of Section 5 to the contrary: (i) No Incentive Stock Option shall be granted to an officer or other employee who holds, directly or indirectly (as provided in Section 424(d) of the Code), at the time of grant more than 10% of the combined voting power of all classes of capital shares of the Company or any subsidiary unless (i) the exercise price is at least 110% of the Fair Market Value of the Shares subject to the Incentive Stock Option on the date the Incentive Stock Option is granted, and (ii) the Incentive Stock Option is not exercisable after the expiration of five years from the date of grant; (ii) The aggregate Fair Market Value (determined as of the time an Incentive Stock Option is granted) of Shares with respect to which Incentive Stock Options are exercisable for the first time by any individual in any calendar year shall not exceed $100,000, or such other maximum amount permitted by the Code; and (iii) No Incentive Stock Option may be granted after March 16, 2007. (b) The Committee may grant Incentive Stock Options from time to time to employees of the Company who formerly were employed by a corporation with which the Company has entered into a transaction described in Section 424(a) of the Code in substitution for incentive stock options held by such persons. Any Incentive Stock Options so granted shall be on such terms and conditions as may be necessary for the grant to be treated as a substitution under Section 424(a) of the Code. To the extent contemplated by Section 424(a) of the Code, any Incentive Stock Options so granted need not comply with the restrictions set forth in Section 5(a) and 6(a) above. 9 7. RESTRICTED SHARES. The terms and conditions of Restricted Shares granted under the Plan (including, without limitation, the restrictions applicable to the Restricted Shares) shall be set forth in an Agreement. The Committee may grant more than one Restricted Share to a Holder during the term of this Plan. Each Restricted Share shall be subject to the following conditions: (a) RESTRICTIONS. At the time Restricted Shares are granted, the Committee shall specify the restrictions applicable to such Restricted Shares and the conditions under which the Restricted Shares will be forfeited to the Company and the conditions under which the restrictions applicable to the Restricted Shares will lapse. The conditions with respect to lapse and forfeiture applicable to the Restricted Shares granted under the Plan shall be intended to create a risk of forfeiture, as determined for purposes of the Code. Such conditions may include, without limitation, passage of a specified period of time during which the Holder must remain employed by the Company and/or satisfaction of specified performance objectives within a specified period of time. The restrictions and the conditions with respect to lapse and forfeiture applicable to Restricted Shares need not be uniform for all Restricted Shares granted under the Plan or for all Restricted Shares granted to any Person under the Plan. (b) RIGHTS OF HOLDERS OF RESTRICTED SHARES. Except as otherwise provided the Plan or in the Agreement with respect to Restricted Shares, a Holder of Restricted Shares granted under the Plan shall have all of the rights of a beneficial owner of such Shares (including, without limitation, the right to receive dividends with respect to such Restricted Shares and to vote such Restricted Shares) unless and until the Restricted Shares are forfeited in accordance with the terms of the Plan and the Agreement with respect to such Restricted Shares. Notwithstanding the foregoing, however, a Holder of Restricted Shares shall not be entitled to receive a certificate with respect to the Restricted Shares prior to the time the restrictions with respect to such Restricted Shares lapse. The Company, however, shall issue a certificate or certificates with respect to Restricted Shares in the name of the Holder, which it shall pending lapse of the restrictions with respect to such Restricted Shares or forfeiture of such Restricted Shares or shall issue the Restricted Shares in the Holder's name in uncertificated form. (c) TRANSFERABILITY. Restricted Shares shall not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of prior to the time the restrictions with respect to such Restricted Shares lapse, and any attempt by the Holder of the Restricted Shares to do any of the foregoing shall be void.. (d) LAPSE OF RESTRICTIONS. Upon satisfaction of all conditions to the lapse of the restrictions with respect to Restricted Shares specified in the Plan or the Agreement with respect to such Restricted Shares, or at such earlier time as is provided in Section 7(f), all restrictions with respect to the Restricted Shares shall lapse (and all rights of the Holder of such Restricted Shares immediately will vest), and the Company shall deliver to the Holder (or the Holder's beneficiary or estate) a certificate or certificates representing the Shares that formerly were Restricted Shares, free of all restrictions imposed pursuant to the Agreement and this Section 8 (other than as provided in Section 7(g)). 10 (e) FORFEITURE OF RESTRICTED SHARES. If, prior to the time that the restrictions with respect to Restricted Shares lapse in accordance with Section 7(d), a Holder of Restricted Shares ceases to be employed by the Company for any reason other than death, Disability or Retirement at age 65, or in such other circumstances as are specified in the Agreement with respect to the Restricted Shares, the Restricted Shares shall be forfeited, unless the Committee otherwise determines prior to the forfeiture. (f) ACCELERATION OF VESTING. Notwithstanding the restrictions imposed under Section 7(a) with respect to Restricted Shares, unless otherwise provided in the Agreement with respect to Restricted Shares, all restrictions with respect to Restricted Shares shall lapse (and all rights of the Holder of such Restricted Shares immediately shall vest) upon a Change of Control, upon the death or Disability of the Holder of the Restricted Shares or upon the Retirement of the Holder of the Restricted Shares, if at the time of such Retirement the Holder is age 65 or older (g) SHAREHOLDER AGREEMENT. Unless otherwise expressly provided in the Agreement at the time Restricted Shares are granted, a Person to whom Restricted Shares are granted who is not bound by the term of the Shareholder Agreement shall become a party to, and shall become bound by, the Shareholder Agreement at the time of such grant and shall execute any instrument which the Committee reasonably determines is necessary for such purpose. If a Person who already is bound by the terms of the Shareholder Agreement is granted Restricted Shares, the Restricted Shares shall be granted subject to the Shareholder Agreement, and the Holder shall execute any instrument which the Committee reasonably determines is necessary for such purpose. 8. TAX WITHHOLDING. With the approval of the Committee, the Holder of an Option or Restricted Shares as to which the restrictions have lapsed may elect to have the Company retain from the Shares to be issued upon the exercise of an Option or from the certificate with respect to the formerly Restricted Shares to be delivered to the Holder, or may deliver to the Company, a number of Shares having a Fair Market Value on the Tax Date equal to all or any part of the federal, state and local withholding tax payments (whether mandatory or permissive) to be made on behalf of the Holder with respect to the exercise of the Option or the lapse of the restrictions with respect to such Restricted Shares (up to a maximum amount determined by the Holder's top marginal tax rate) in lieu of making such payments in cash. The Committee may establish rules or limitations with respect to the exercise of the rights described in this Section 8 from time to time; provided, however, that any such election made by a person subject to Section 16 of the Exchange Act must be made in accordance with any applicable rules established thereunder. 9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of a Change in Capitalization, the Board or the Committee shall determine the appropriate adjustments, if any, to the maximum number and class of shares with respect to which Options or Restricted Shares may be granted under the Plan, the number and class of shares subject to outstanding Options granted under the Plan and the exercise price thereof, if applicable, and the number and class of outstanding Restricted Shares granted under the Plan as to which the restrictions have not lapsed, and any such determination by the Board or the Committee shall be conclusive. Any additional Restricted Shares issued pursuant to an adjustment made under this section with respect to outstanding Restricted Shares shall be 11 subject to the same restrictions and conditions with respect to lapse of such restrictions and forfeiture as the outstanding Restricted Shares with respect to which the additional Restricted Shares are issued. 10. TERMINATION AND AMENDMENT OF THE PLAN. Unless earlier terminated by the Board, the Plan shall terminate on March 17, 2007, and no Options or Restricted Shares thereafter may be granted under the Plan. The Board may terminate the Plan at any time and may amend the Plan and outstanding Agreements from time to time; provided, however, that no such amendment shall be effective unless approved by the shareholders of the Company, if such shareholder approval is required (a) so that transactions hereunder will be exempt under Rule 16b-3 under the Exchange Act or (b) to comply with any other applicable law, regulation or stock exchange rule. The rights and obligations of a Holder with respect to any Option or Restricted Shares outstanding at the time of any such amendment to the Plan or any Agreement shall not be adversely altered or impaired by such amendment, except with the consent of such Holder. 11. GOVERNING LAW; APPROVALS. (a) The Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Ohio without giving effect to the choice of law principles thereof. (b) The obligation of the Company to sell or deliver Shares with respect to Options granted under the Plan and the grant of Restricted Shares under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws and the rules of any stock exchange on which the Shares are listed. (c) If at any time the Committee determines, in its absolute discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Option or Restricted Shares or the issuance of Shares upon the exercise of an Option, no Option or Restricted Shares shall be granted or payment made or Shares issued, in whole or in part, unless such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee. 12. EFFECTIVE DATE. The Plan was approved by the Board on March 17, 1997, subject to approval by the affirmative vote of the holders of Common Shares entitling them to a majority of the voting power of the Company present in person or by proxy at the Annual Meeting of Shareholders of the Company to be held on May 8, 1997. The Plan shall become effective upon the approval of Plan by the holders of Common Shares entitling them to exercise a majority of the voting power of the Company present at the Annual Meeting of Shareholders in person or in proxy. EX-10.2 3 EXHIBIT 10.2 1 Exhibit 10.2 DAYTON SUPERIOR CORPORATION 1997 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN ------------------------------------------- 1. PURPOSE. The purpose of the Plan is to promote the interests of the shareholders of the Company by increasing the identity of interests among the directors of the Company who are not employees of the Company and the shareholders of the Company. 2. DEFINITIONS. For purposes of the Plan: "AGREEMENT" means a written agreement between the Company and a Nonemployee Director evidencing the grant of an Option and setting forth the terms and conditions of the Option. "BOARD" means the Board of Directors of the Company. "CHANGE IN CAPITALIZATION" means any increase, reduction or change or exchange of Shares for a different number or kind of shares or other securities of the Company by reason of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants or rights, stock dividend, stock split or reverse stock split, combination or exchange of shares, repurchase of shares, change in corporate structure or otherwise. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMON SHARES" means any class of common shares of the Company. "COMPANY" means Dayton Superior Corporation, an Ohio corporation. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "FAIR MARKET VALUE" means the average of the highest sale price and the lowest sale price of a Share on the date the value of a Share is to be determined, as reported on the New York Stock Exchange and published in the WALL STREET JOURNAL or, if no sale is reported for such date, then on the next preceding date for which a sale is reported or, if the Shares no longer are traded on the New York Stock Exchange, the determination of such value as shall be determined by the Board in good faith. "NONEMPLOYEE DIRECTOR". means a director of the Company who is not an employee of the Company or any subsidiary of the Company; provided, however, that the Board, in its discretion, from time to time may further limit the directors who constitute Nonemployee Directors for purposes of the Plan. 2 "OPTION" means a right to purchase Shares granted under the Plan. Options granted under the Plan are not intended to qualify as incentive stock options under Section 422 of the Code. "PLAN" means this 1997 Nonemployee Director Stock Option Plan, as amended from time to time. "QUALIFIED DOMESTIC RELATIONS ORDER" means a qualified domestic relations order as defined in Section 414(p)(1)(B) of the Code which satisfies the conditions of Section 414(p)(1)(A) of the Code. "RIPPLEWOOD" means Ripplewood Holdings L.L.C., a Delaware limited liability company. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SHARES" means the Class A Common Shares, without par value, of the Company (including any new, additional or different shares or securities resulting from a Change in Capitalization). 3. ADMINISTRATION. The Plan shall be administered by the Board. Subject to the express terms and conditions set forth in the Plan, the Board shall have the power from time to time: (i) to construe and interpret the terms of the Plan and the Options including, without limitation, to correct any defect or omission or to reconcile any inconsistency in the Plan or in any Agreement and to establish, amend and revoke rules and regulations for the administration of the Plan, in the manner and to the extent the Board deems necessary or advisable to make the Plan fully effective (and all decisions and determinations by the Board in the exercise of this power shall be final and binding upon the Company and each Nonemployee Director), and (ii) generally, to exercise such powers and to perform such acts as the Board deems necessary or advisable to promote the best interests of the Company with respect to the Plan. 4. SHARES SUBJECT TO THE PLAN. (a) The maximum number of Shares that may be issued or delivered pursuant to Options granted under the Plan is 40,000, subject to adjustment as provided in Section 9. Such Shares may be authorized but unissued Shares or Shares held in treasury. The Company shall reserve, for purposes of the Plan, out of its authorized but unissued Shares or treasury Shares, or partly out of each, such number of Shares as shall be determined by the Board. (b) Whenever any outstanding Option or any portion of an outstanding Option expires, is canceled or otherwise terminates (other than by exercise), the Shares subject to the unexercised portion of the Option which has expired, been canceled or has terminated again shall be available for the grant of Options hereunder without reducing the number of Shares otherwise available under the Plan. Shares which have been surrendered to or withheld by the Company to satisfy all or a portion of the purchase price of an Option or a tax withholding obligation with respect to an Option thereafter shall not be available under the Plan. 3 5. GRANT OF OPTIONS. During the term of the Plan: (i) each Person who is a Nonemployee Director immediately following each Annual Meeting of Shareholders of the Company, commencing with the 1997 Annual Meeting of Shareholders, automatically shall be granted an Option to purchase 2,000 Shares, effective as of the date that such Annual Meeting of Shareholders is concluded, and (ii) each person who, after the effective date of the Plan, first becomes a Nonemployee Director at any time other than at an Annual Meeting of Shareholders of the Company shall be granted an Option to purchase a number of Shares (rounded to the nearest whole Share) determined by multiplying 2,000 by a fraction, the numerator of which is twelve less the number of months (rounded to the nearest whole month) from the most recent Annual Meeting of Shareholders of the Company to the date such Person first becomes a Nonemployee Director and the denominator of which is twelve, effective as of the date such Person first becomes a Nonemployee Director. Except as set forth in this Section 5, no Options may be granted under the Plan. 6. TERMS OF OPTIONS. The terms and conditions of each Option granted under the Plan shall be set forth in an Agreement. Each Option and Agreement shall be subject to the following conditions: (a) EXERCISE PRICE. The exercise price per Share of each Option shall be the Fair Market Value of a Share on the date the Option is granted. (b) DURATION. Each Option shall have a term of ten years from the date the Option is granted. (c) EXERCISABILITY. Each Option granted under the Plan shall be fully exercisable at the time the Option is granted. (d) NON-TRANSFERABILITY. No Option granted under the Plan shall be pledged, assigned, hypothecated or transferred by the Nonemployee Director other than by will or the laws of descent and distribution or pursuant to a Qualified Domestic Relations Order. Options may be exercised during the lifetime of a Nonemployee Director only by the Nonemployee Director or the Nonemployee Director's guardian or legal representative or the transferee under a Qualified Domestic Relations Order. A Nonemployee Director may designate a person or persons to receive, in the event of such Nonemployee Director's death, an Option or portion of an Option held by the Nonemployee Director at the time of death or any amount payable with respect thereto to which the Nonemployee Director then would be entitled. (e) EXERCISE OF OPTION. (i) An Option may be exercised only by a written notice delivered to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor and otherwise in accordance with the Agreement. The exercise price for the Shares to be purchased pursuant to the exercise of an Option shall be paid in full upon such exercise in cash, by check or by transferring Shares to the Company or by the retention by the Company of Shares to be issued upon the exercise of such Option, or any combination thereof. Any Shares transferred to the Company or retained by the Company as payment of the exercise price of an Option shall be valued at their Fair Market Value on the date the Option is exercised. If required by the Board, 4 the Nonemployee Director shall deliver the Agreement evidencing the Option to the Secretary of the Company, who shall endorse on the Agreement a notation of such exercise and shall return such Agreement to the Nonemployee Director. Any exercise of an Option for fewer than all of the Shares covered by the Option shall be for at least ten Shares. No fractional Shares shall be issued upon the exercise of an Option. (ii) If the Plan or any law, regulation or interpretation requires the Company to take any action regarding the Shares before the Company issues certificates for the Shares being purchased, the Company may delay delivering the certificates for the Shares for the period necessary to take such action; provided, however, that the Company shall use its reasonable best efforts to promptly take any such action. The certificate or certificates representing Shares acquired upon the exercise of an Option may bear a legend restricting the transfer of such Shares to the extent required by applicable law, regulation or interpretation, and the Company may impose stop transfer instructions to implement such restrictions, if applicable. (f) RIGHTS OF NONEMPLOYEE DIRECTOR. No Nonemployee Director shall be deemed for any purpose to be the owner of any Shares subject to an Option unless and until the Option has been validly exercised, the Company has issued and delivered certificates for the Shares to the Nonemployee Director, and the Nonemployee Director's name has been entered as a shareholder of record on the books of the Company. (g) AMENDMENT OF OPTIONS. Subject to the terms and provisions of the Plan, the Board may amend any outstanding Option in any respect; provided, however, that (i) no such amendment shall reduce the exercise price of the Option (except to set forth an adjustment in the exercise price made pursuant to Section 9), and (ii) the consent of the Nonemployee Director of the Option to such amendment must be obtained if the amendment would adversely affect the rights of the Nonemployee Director under the Option. 7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of a Change in Capitalization, the Board shall determine the appropriate adjustments, if any, to the maximum number and class of shares with respect to which Options may be granted under the Plan, the number and class of shares subject to outstanding Options granted under the Plan and the exercise price thereof, if applicable, and any such determination by the Board shall be conclusive. 8. TERMINATION AND AMENDMENT OF THE PLAN. Unless earlier terminated by the Board, the Plan shall terminate on March 17, 2007 (or such earlier date as of which the maximum number of Shares which may be issued or delivered upon the exercise of Options granted under the Plan have been so issued or delivered), and no Options thereafter shall be granted under the Plan. The Board may terminate the Plan at any time and may amend the Plan and outstanding Agreements from time to time; provided, however, that no such amendment shall be effective unless approved by the shareholders of the Company, if such shareholder approval is required (a) so that transactions hereunder will be exempt under Rule 16b-3 under the Exchange Act or (b) to comply with any other applicable law, regulation or stock exchange rule. The rights and obligations of a Nonemployee Director with respect to any Option outstanding at the time of any such amendment to the Plan or 5 any Agreement shall not be adversely altered or impaired by such amendment, except with the consent of such Nonemployee Director. 9. GOVERNING LAW; APPROVALS. (a) The Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Ohio without giving effect to the choice of law principles thereof. (b) The obligation of the Company to sell or deliver Shares with respect to Options granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws and the rules of any stock exchange on which the Shares are listed. (c) If at any time the Board determines, in its absolute discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Option or the issuance of Shares upon the exercise of an Option, no Option shall be granted or payment made or Shares issued, in whole or in part, unless such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Board. 10. EFFECTIVE DATE. The Plan was approved by the Board on March 17, 1997, subject to approval by the affirmative vote of the holders of Common Shares entitling them to a majority of the voting power of the Company present in person or by proxy at the Annual Meeting of Shareholders of the Company to be held on May 8, 1997. The Plan shall become effective upon the approval of Plan by the holders of Common Shares entitling them to exercise a majority of the voting power of the Company present at the Annual Meeting of Shareholders in person or in proxy. EX-10.3 4 EXHIBIT 10.3 1 Exhibit 10.3 NONEMPLOYEE DIRECTORS COMPENSATION PROGRAM ------------------------------------------ RESOLUTION ADOPTED BY DIRECTORS ON APRIL 26, 1997: RESOLVED, that the Corporation pay each director of the Corporation who is not an employee of the Corporation or Ripplewood Holdings L.L.C. an annual retainer in the amount of $20,000, payable in Class A Common Shares. RESOLUTIONS ADOPTED BY DIRECTORS ON MARCH 17, 1997: WHEREAS, at a meeting held on April 26, 1996, the Board of Directors approved a compensation program for the directors of the Corporation who are not employees of the Corporation or Ripplewood Holdings L.L.C. ("Ripplewood") under which each such director is entitled to an annual retainer in the amount of $20,000, payable in Class A Common Shares, without par value, of the Corporation ("Class A Shares"); and WHEREAS, at the time such program was approved, the timing of the payment of the annual retainer was not determined, and no retainer payments have yet been made; NOW, THEREFORE, IT HEREBY IS RESOLVED, that the $20,000 annual retainer payable to each director who is not an employee of the Corporation or Ripplewood shall be paid at or as soon as practicable after the date of each Annual Meeting of Shareholders to each such director who continues as a director following such meeting, by the issuance by the Corporation of Class A Shares with a value (based on the closing price of a Class A Share on the last trading day prior to such Annual Meeting) of $20,000, rounded to the nearest whole share. FURTHER RESOLVED, that if a director who is not an employee of the Corporation or Ripplewood is elected to the Board of Directors at any time other than at an Annual Meeting of Shareholders, such director shall receive as soon as practicable after such election a retainer payable by the issuance by the Corporation of Class A Shares with a value equal to $20,000, prorated for the period from the date of such election until the next Annual Meeting of Shareholders (based on the closing price of a Class A Share on the last trading day prior to such election), rounded to the nearest whole share. FURTHER RESOLVED, that the Corporation also shall issue to Messrs. Andrews, Diggs and Holmes, on or as soon as practical after the date of the 1997 Annual Meeting of Shareholders, a number of Class A Shares with a value equal to $20,000, prorated for the period from the earlier of the date he was elected as a director of the Corporation or April 26, 1996 until the date of the 1997 Annual Meeting of Shareholders (based on the closing price of a Class A Share on the last trading day prior to the 1997 Annual Meeting of Shareholders), rounded to the nearest whole share. EX-11 5 EXHIBIT 11 1 Exhibit 11.1 DAYTON SUPERIOR CORPORATION EXHIBIT 11 - COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE (Amounts in thousands, except share and per share amounts)
Three Fiscal Months Ended Six Fiscal Months Ended ------------------------- ----------------------- June 28, June 27, June 28, June 27, 1996 1997 1996 1997 ------------------------- ----------------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Weighted average number of common shares outstanding during the period 3,517,584 5,696,432 3,404,068 5,686,648 Common equivalent shares outstanding (a) 45,210 142,214 45,210 142,818 Weighted average common and common ------------------------- ----------------------- equivalent shares outstanding 3,562,794 5,838,646 3,449,278 5,829,466 Income before income taxes and extraordinary item $2,266 $2,951 $1,865 $3,111 Extraordinary item (2,314) 0 (2,314) 0 ------------------------- ----------------------- Income (loss) per share before extraordinary item ($48) $2,951 ($449) $3,111 ========================= ======================== Income per share before extraordinary item $0.64 $0.51 $0.54 $0.53 Extraordinary item (0.65) 0.00 (0.67) 0.00 ------------------------- ----------------------- Net income (loss) per share ($0.01) $0.51 ($0.13) $0.53 ========================= ======================== Fully diluted earnings per share are not significantly different from primary earnings per share. - -------------------- Notes: (a) Common equivalent shares are shares issuable upon the exercise of stock options and warrants, less the shares that could be purchased with the proceeds from the exercise of the options and warrants, based on the company's average trading price for 1996 and the company's ending trading price for 1997.
EX-27 6 EXHIBIT 27
5 0000854709 DAYTON SUPERIOR CORPORATION 1,000 U.S. DOLLARS 3-MOS DEC-31-1997 MAR-29-1997 JUN-27-1997 1 316 0 23,669 447 18,855 44,713 33,438 14,957 123,069 23,936 38,395 42,851 0 0 13,593 123,069 39,839 39,839 26,906 26,906 6,943 (3) 797 5,193 2,242 2,951 0 0 0 2,951 0.51 0.51
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